US FED Policy

DarkDusk

Hey guys,

I want to hear your opinions on what action you think the US Federal Reserve will make in the near future. Their actions I believe will be very important and could have significant impact on world markets.

There is a belief on wall street and in the media for over a year now that the Fed will raise interest rates this year. I think they cannot and will not raise rates. There are many reasons I believe this:

1. The US economy is too weak to raise rates and could slow growth even more, pushing the US into recession.
2. The US Dollar is too strong, mainly due to the anticipation of higher rates.
3. Inflation is too low for the Fed to raise rates, oil is rock bottom.

If the Fed goes back on their plans and does not raise rates, I believe the floor will come from under the US dollar and we will see a major crash vs. other currencies.

In my opinion, the Fed will increase monetary stimulus instead of raise rates (they may raise rates a bit, and then drop them again). I think this currency war is far from over and the US will be the one winning it shortly.

conditioned games

There will be no increase in interest rates. They will continue their bluffing. Interest rates in junk bond has spiked to 16 per cent recently. The bond market will collapse first taking down the stock markets end of next month. World will enter deflationary period as people put off spending and oil goes under 30 dollars. They'll launch Qe4 and rest of world will also ramp up printing currency which will have no effect. Eventually hyperinflation takes over and US dollar goes the way of Zimbabwe.

Low Energy Eng

September 16 is rocking around fast. At this moment;

Against rates hikes -

The global economic outlook has worsened since the Federal Reserve’s last meeting in July, which will lead the U.S. central bank to hold off on lifting interest rates in September, a panel of former Fed officials agreed Thursday.

http://www.marketwatch.com/story/panel-of-ex-fed-officials-say-no-rate-hike-will-come-at-september-meeting-2015-09-03

For rate hikes -

The headline job gains were less than expected, but the unemployment rate drop was larger than had been forecast and put this measure right in the middle of the range — 5.2%-5.0% — where the Fed considers the economy to be at “full employment.”

And following this report, economists across Wall Street think the time is now for the Fed to raise rates.

http://www.businessinsider.com.au/federal-reserve-september-rate-hike-2015-9

Personally, I think they will leave rates as they are, but I've been wrong plenty of times before.

For ever odd

An Insight to how it works.

https://www.stlouisfed.org/in-plain-english/introduction-to-the-fomc

Also

http://www.federalreserve.gov/monetarypolicy/fomc.htm

2015 Members of the FOMC

Members
Janet L. Yellen, Board of Governors, Chair
William C. Dudley, New York, Vice Chairman
Lael Brainard, Board of Governors
Charles L. Evans, Chicago
Stanley Fischer, Board of Governors
Jeffrey M. Lacker, Richmond
Dennis P. Lockhart, Atlanta
Jerome H. Powell, Board of Governors
Daniel K. Tarullo, Board of Governors
John C. Williams, San Francisco

Who is a hawk and who is a dove?

euroboom13

Rates will rise along with massive devaluations!...American stock market will rise but no gain for foreign investors due to weak $.

You can't get investment growth without a rate hikes.

For ever odd

Forex
Commodities
Bonds
Equities

How will Thursday's rate decision and policy statement effect the above in domestic(US), emerging markets And world markets?

TiGeR KiNgS

For ever odd wrote: »

Forex
Commodities
Bonds
Equities

How will Thursday's rate decision and policy statement effect the above in domestic(US), emerging markets And world markets?

If interest rate is increased ;

Forex
Dollar strengthens

Commodities
Prices decrease relative to the dollar

Bonds
Bond yields increase

Equities
Share prices fall as people rebalance portfolios into fixed income

Emerging markets & World markets probably fall as $ liquidity falls

I believe this is what would happen under normal circumstances ?, maybe prices already reflect a rate increase ?

joe_six_cans

signals are extremely mixed

treasury yields are rising indicates they will raise

oil price is rising indicates they wont raise

dollar euro is weak indicates they wont

financial sector is rising ( considering the fall it had a month ago ) indicates they will rise

overall market is pretty positive which you might think suggest there will be no hike , it could however indicate the market is at peace with the idea and wants it over with

personally i think they wont as i think yellen is a lily livered fed chairperson and hasnt the guts to move

Low Energy Eng

http://www.telegraph.co.uk/finance/economics/12046529/Federal-Reserve-set-to-raise-rates-in-historic-moment-for-global-economy.html

Anyone care to speculate on Wednesdays "historic moment" ...
I'm going to say they will raise rates.

RobertKK

They will rise rates: not rising them sends a more negative message to the markets than rising will. I think a rise is mostly priced in, so Yellen will rise rates and give dovish comments about rates for 2016.
Overall just a token increase in rates is what I predict.

Amirani

RobertKK wrote: »

They will rise rates: not rising them sends a more negative message to the markets than rising will. I think a rise is mostly priced in, so Yellen will rise rates and give dovish comments about rates for 2016.
Overall just a token increase in rates is what I predict.

Agreed

dasdog

+25bps with a numbers dependent statement which may be read as dovish. Any less would create more confusion. Staying well clear of this (unless they don't move) but I'll be glued to my screens. Like a sizable number of people, I've never been through a hike so I'll sit this out from the sidelines.

Busyness1

I think a .125 increase will have to happen, economic data has been positive. If they are attributing the rise to the data as they say they are then it's inevitable. If they don't they risk some negative market reaction in addition to less favourable economic data going forward

Amirani

And we're in positive territory for the target fed funds. 25bps rise.

Language and forecasts seem dovish - S&P rallying.

DarkDusk

So US markets have fallen 10% since the Fed has risen rates, no coincidence if you ask me. Now I'm waiting for Yellen and friends to come for the rescue, however it may be too late by the time they do.

QE4 is coming folks.

DarkDusk

Does anyone else agree?

For ever odd

Technically QE4 has already happened. I think they called it QE4ever.

Low Energy Eng

http://reut.rs/1Q2h8zZ

I think the next meeting they will leave rates where they are.

"Central banks need to defend their credibility. That is why this is worrisome," Bullard said

But yes Darkdusk, I agree, just a matter of time. The financials are under pressure already.

moneymad

Low Energy Eng wrote: »

http://reut.rs/1Q2h8zZ

I think the next meeting they will leave rates where they are.

"Central banks need to defend their credibility. That is why this is worrisome," Bullard said

But yes Darkdusk, I agree, just a matter of time. The financials are under pressure already.

they will raise.

Low Energy Eng

So with the election coming up, are rate hikes going to be taken off the table?
Or does anyone think they'll raise? If so, what's the reasoning?

Recent jobs numbers were awful.

For ever odd

She will let you know on Monday.

Amirani

Not a chance or a raise in June. July potentially, but Friday's data definitely hurts.

Roonbox

Dan Nathan explains here how small a chance there is for a rate hike in the rest of the year -

http://video.cnbc.com/gallery/?video=3000522880